India’s forex reserves rise for seventh straight week, jump $2.9 billion to hit all-time high of $648 billion

India’s foreign exchange reserves (forex) increased $2.98 billion to $648.562 billion for the week ended April 5, data released by the the Reserve Bank of India (RBI) showed on Friday, April 12. This is the seventh consecutive week of a jump in overall reserves. In the previous reporting week, the forex kitty had increased by $2.951 billion to $645.583 billion, which was an all-time high.

In September 2021, the country’s forex kitty reached an all-time high of $642.453 billion, a level that was breached in March this year. The reserves took a hit as the central bank deployed the kitty to defend the rupee amid pressures caused majorly by global events, but there has been a steady accretion over the past few months.

Also Read: India’s forex reserves rise for sixth straight week, jump $2.6 billion to hit all-time high of $645.5 billion

For the week ended April 5, the foreign currency assets (FCA), a major component of the reserves, increased by $549 million to $571.166 billion, the data released on Friday showed. Expressed in dollar terms, the FCA include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

Changes in FCA are caused by the RBI’s intervention as well as the appreciation or depreciation of foreign assets held in the reserves. RBI intervenes in the foreign exchange market to curb excess volatility in the rupee.

Gold reserves increased by $2.398 billion to $54.558 billion during the week, said the RBI. The Special Drawing Rights (SDRs) were up by $24 million to $18.17 billion, said RBI. Forex reserves also include India’s reserve tranche position in the International Monetary Fund (IMF). India’s reserve position with the IMF was also up by $9 million to $4.669 billion in the reporting week, showed RBI data.

The rupee depreciated 13 paise to close at 83.44 against the US dollar on Friday, weighed down by a massive sell-off in domestic equities and a strong greenback against major crosses overseas. Forex traders said elevated crude oil prices also dented investor sentiments.

At the interbank foreign exchange market, the local unit opened at 83.36 and touched an intraday low of 83.44 against the greenback. The local unit finally settled at 83.44, registering a loss of 13 paise from its previous close.